Although a majority of federal agencies said they struggle with using financial incentives to recruit and retain employees due to budget constraints, analysts recommended that the Office of Personnel Management do more to make the approval process more predictable and streamlined.

The Government Accountability Office released a report last week on the usage of special pay authorities, which include special pay rates, recruitment and relocation incentives, retention incentives and student loan repayment, and found that the usage of these programs has not been adequately studied for its effectiveness on a governmentwide level.

Overall, federal agencies spent $805 million in financial incentives for employees from fiscal 2014 to 2016. Of that, $333 million was spent to retain employees, $174 million for recruitment and $149 million to help employees relocate. The government spent $148 million in the form of student loan repayments.

Although most of the 26 agencies surveyed by GAO reported using special pay authorities in some form, the programs have not been used widely in an attempt to attract workers to federal service. In fiscal 2016, less than 6 percent of roughly 2 million federal employees received compensation under at least one of the government’s seven special payment authorities, and more than half of the agencies reported using their authorities on fewer than 100 employees per year.

The top challenge reported by agencies when considering whether to employ special pay authorities was insufficient resources—13 agencies described budgetary constraints as an issue they ran into “regularly or always.” Four agencies cited burdensome documentation and a complex approval process as a stumbling block for usage of special pay authorities.

GAO said these programs could be a valuable tool at a time when the federal government faces a massive retirement crunch and vacancies in a variety of high-skill occupations, like STEM, cybersecurity and acquisitions.

“Balancing constrained budgets with a potential wave of employee retirements and the need to fill gaps in mission-critical skills within the federal workforces underscores the need for agencies to cost-effectively use special payment authorities,” GAO wrote.

But, analysts said, OPM has not sufficiently measured the effectiveness of these programs on a governmentwide basis. Some agencies have assessed internal use of special pay authority programs in recent years, and have found they positively impacted hiring efforts.

“OPM collects agency data on the use of special pay authorities via annual reporting on certain authorities, but has not analyzed whether they help agencies to improve recruitment and retention governmentwide,” GAO wrote. “Nor has OPM assessed trends and factors that can affect the use of these authorities.”

GAO found that OPM has been inconsistent in its guidance to agencies on how to assess the use of recruitment and retention incentives, and could provide better information on what would constitute a successful request to use a special pay authority.

“By establishing documented procedures and periodically reviewing them, OPM would increase the likelihood of consistent decisions to grant or decline agency requests for approval to use these authorities,” they wrote.

Analysts recommended that OPM track the use of special pay authorities across government to analyze how effective each program is in recruitment and retention. GAO also said the director of OPM should establish documented procedures for assessing requests to use pay incentive programs and consider ways to streamline the process.

The agency concurred in part with these recommendations. OPM officials said they would track the use of each special pay authority, although for a shorter time frame than GAO initially requested.

Officials warned that attempting to develop a “one-size-fits-all” formula for agency requests could result in “unwarranted disapprovals,” but agreed to document additional procedures to improve the evaluation of agencies’ requests.

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